What is revenue-driven marketing? And why you need it more than ever
A shift is happening in B2B SaaS marketing.
More than ever, marketing teams aren’t just responsible for driving traffic and leads. They’re under pressure to deliver real, measurable results — revenue. In fact, 63% of marketers say they’re under extreme pressure to deliver revenue growth, according to the CMO Council.
That pressure on marketing teams is only going to increase given the current economic environment. Budgets are getting tighter, acquisition costs are going up, and channels are more competitive. Not to mention, marketing and sales teams aren’t always speaking the same language when it comes to hitting goals. All of these factors are making it harder for marketers to optimize their strategies and achieve revenue targets.
So what can marketing teams do to adapt to this new reality? And how can they build a go-to-market engine that not only drives revenue growth, but efficient revenue growth?
It starts with a shift in mindset — from driving leads and MQLs to driving pipeline and revenue. From growing at all costs to growing efficiently and sustainably. From operating as a cost center to becoming a profit center.
We call this revenue-driven marketing at Clearbit, and in the rest of this article, I’ll walk you through what it is and why you need to be thinking about it now.
What is revenue-driven marketing?
Revenue-driven marketing is a strategic and systematic approach that focuses all marketing activities on discovering, engaging, and converting ideal customers to generate revenue.
When teams embrace a revenue-driven marketing strategy, they’re:
- Closely aligned with sales
- Able to measure the revenue impact of their investments
- Seen as a core revenue driver instead of a cost center
Though you may have not heard the term “revenue-driven marketing” until recently, it’s not an entirely new concept. Debbie Qaquish of the Pedowitz Group coined the term “revenue marketing” back in 2010 and identified four stages that every marketing team goes through on their path to a revenue-driven approach.
Traditional marketing is where most marketing teams start off. This approach tends to focus on the number of activities completed — splashy launches, campaigns, and events — and “vanity metrics” rather than business results. Operational and tech silos between marketing and sales are the norm in this stage.
In the lead generation stage, marketing efforts are focused on achieving lead volume and high conversion rates while keeping cost per lead low. While there might be some alignment between marketing and sales, there’s no shared understanding of who’s an ideal customer, no common goals or KPIs, and leads get lost in broken scoring and routing processes.
Demand generation goes beyond capturing existing demand to creating new demand — converting it into revenue. In this stage, marketing teams are contributing to the bottom line and have good alignment with sales reps, though they’re still having challenges nailing proper attribution and replicating revenue wins at scale.
When teams adopt a revenue-driven marketing approach, they’re contributing to revenue goals in a measurable, predictable, and repeatable way. And because they’re focused on the same ideal customers as sales, both teams are working in lockstep to reach, engage, and convert their most valuable customers throughout the buyer’s journey.
Why revenue-driven marketing is more important than ever
If revenue-driven marketing isn’t new, then why is it gaining traction now?
Leading B2B SaaS players like Asana, Drift, Alyce, and Thoughtspot now have revenue marketing teams. And here at Clearbit, both marketing and sales now roll up to our CRO Kevin Tate.
If you consider how the B2B buyer’s journey has changed, it’s not that surprising. With so much of the customer journey happening online now, marketing is no longer just responsible for starting conversations that sales then finishes. The marketing experience extends deep into the funnel, sometimes even to the point of purchase. For SaaS businesses to grow revenue efficiently and effectively, marketing and sales teams need to tightly coordinate their activities along the revenue chain, from top to bottom.
Marketing teams also face major hurdles externally. Acquisition costs have gone up. Between 2014 and 2019, CAC rose 60%. It’s more expensive to run paid campaigns due to limited ad inventory. Marketing channels are more competitive, making it harder to stand out in a crowded market. These headwinds are exacerbated by current economic uncertainty, leading to tighter marketing budgets, hiring slowdowns, and other cost-cutting measures.
To successfully navigate these conditions, marketers need to prove their ability to efficiently, and predictably, drive revenue — not leads, not MQLs.
In other words, they need to embrace a revenue-driven marketing strategy.
How to get started with revenue-driven marketing
Making the shift to revenue-driven marketing requires teams to build scalable and systematic motions for reaching, engaging, and closing prospective buyers that resemble their most valuable customers. We call this activating your ICP (ideal customer profile) at Clearbit, and some of our most successful customers are taking this approach to revenue generation.
The basic premise is simple: Determine which of your current customers create the most value for your business. Then focus on acquiring more customers like them to increase revenue.
To help marketing teams of all sizes activate their ICP, we’ve developed the FOCUS Playbook. Here’s a brief overview:
- Foundation. Enrich your source of truth (whether it’s a CRM like Salesforce or Hubspot, marketing automation platform like Marketo, or customer data platform like Segment) with automatic, accurate, and fresh data. And gain insights on your most valuable customers. Without reliable, foundational intelligence, it’s impossible to do revenue-driven marketing well. Getting your data house in order enables you to identify and target the right prospects, personalize their experience, and route them to sales as soon as they’re ready to buy.
- Operationalize. Activate your Ideal Customer Profile across your go-to-market tools, channels, and motions. While marketing teams might spend time thinking about and defining their ICP, more often than not, it lives on a slide gathering dust. Applying your ICP definition across systems ensures that marketing and sales are reaching the same target audiences and enables more timely and relevant experiences for prospects.
- Convert. Delight ideal prospects with personalized experiences, tailored conversion paths, and relevant messaging. From your very first touchpoint, whether it’s an ad, landing page, or email, you want to make sure every segment and buyer persona in your ICP has a personalized experience. Create marketing campaigns and messaging that focus on their specific needs or pains at every stage of the funnel.
- Unlock. De-anonymize site traffic, reveal account-based intent, and prioritize GTM activities and resources towards ready-to-buy prospects. Instead of reaching out to prospects who aren’t ready to buy (cold outbound, anyone?), prioritize prospects who are showing intent on your website. You can also personalize chat experience and fast-track leads based on website engagement data.
- Scale. Build a precise, systematic, and always-on targeting engine to efficiently reach and engage your ICP with the right message at the right time. Lots of demand programs take a static approach to demand creation. Instead, build an engine based on engagement by creating an audience for each buyer persona and key milestone along your customer journey.
Ready for revenue-driven marketing?
With focus and intention, marketing teams can (and will) get through the challenges ahead. And they’ll come out on the other side stronger, as revenue leaders. Stay tuned over the next few weeks for more insights and tips on putting revenue-driven marketing into practice.